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A 1.7% drop in house purchase approvals in May

Proportion of small-deposit lending falls to 18.4%, as first-time buyers continue feeling the squeeze, while large-deposit borrowers make up nearly a third (30.7%) of May’s home lending market

The latest Mortgage Monitor from e.surv, the UK’s largest residential chartered surveyor, has reported a 1.7% drop in the number of house purchase approvals in May - with 65.113 compared to 66,250 approvals in the previous month.

Recent falls represent a marked turnaround from the peak in lending seen at the start of the year. January and February both saw strong numbers of house purchase approvals granted (73,060 and 72,512 per month respectively) as buy-to-let landlords and second homebuyers pushed through purchases ahead of the stamp duty changes in April. Now, by comparison, the lending market is settling back into its usual rhythm. On an annual basis however, house purchase lending rose marginally in May, by 0.8%.

The proportion of small-deposit lending also dropped slightly in May, to comprise 18.4% of total home lending – down from 19.1% the previous month. Meanwhile, lending to large-deposit buyers, those with a deposit of 60% or more, picked up significantly and now makes up almost a third (30.7%) of all borrowing.